1 eFX Daily colour

1.1 FX Spot

1.1.1 Overview

(Feb-26) Stocks and other assets steadied as investors moved on from weak US economic data that had rattled financial markets on Tuesday. In Asian trading, gold, Bitcoin, and oil traded within a tight range after overnight declines, while oil in New York steadied after dropping into the $60s-a-barrel range, gold edged up, and Bitcoin fell 6% overnight. Investors turned to safer assets following a weak US consumer confidence report, raising concerns about the broader economy and President Trump’s policies.

  • Gold trades at $2914.80 per ounce, and was down 1.21% yesterday.
  • Oil trades at $73.23 per barrel, and was down 2.10% yesterday.

Market steadiness will be tested later when Nvidia Corp. reports earnings. Copper prices climbed after Trump signed an executive action to examine possible tariffs on the metal. Investors are awaiting this week’s reading on prices, with the Fed’s preferred inflation metric expected to cool to the slowest pace since June.

The rand faced some headwinds at the back on load-shedding announcement to stage 6, which is now suspended.

Against the crosses:

  • EURZAR trades at 19.3261.
  • GBPZAR trades at 23.2901.

Key events today:

  • SA inflation came inline with expectation with Core CPI MoM at 0.2%.
  • Nvidia earnings, 22h50 SAST [re Deepseek AI model]

1.1.2 US

(Feb-19) President Donald Trump announced plans to impose 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with an announcement expected by April 2. He aims to give companies time to establish US-based operations to avoid tariffs. These new levies could significantly impact industries and lead to higher consumer prices, particularly affecting countries like Mexico, South Korea, Malaysia, and Singapore.

(Feb-24) The Trump administration has taken several actions against China, increasing the risk of worsening ties. President Trump issued a memorandum to curb Chinese investment in strategic American sectors and urged Mexico to levy Chinese imports. The US also proposed fees on Chinese-made commercial ships. These moves led to a drop in Chinese shipping stocks and fluctuations in the CSI 300 Index, while the yuan rose 0.2% against the dollar, now trading at 7.2435.

1.1.3 SA

(Feb-17) The Rand remained stable at 18.32 against the $ after a volatile week, initially weakening due to the national budget postponement but recovering with rising global gold prices. The budget delay, caused by disagreements over a proposed VAT increase, is unprecedented and creates uncertainty ahead of the mid-March presentation. Markets are watching for debt consolidation and expenditure cuts in the revised budget.

Over the weekend, we saw a return of load-shedding to stage 6 but Eskom has announced a reduction to stage 4, effective from 00h30 on Monday, February 24th. This decision follows the successful return of most downed units, which has improved the power supply situation.

On the positive side: SA may be eligible to exit the FATF gray list in October, having addressed 20 of 22 items required for delisting. The National Treasury confirmed significant progress in improving the country’s financial security systems, with only two items remaining to be addressed. This progress has been acknowledged by the FATF, which will consider SA’s delisting in its upcoming October review.

1.1.3.1 eFX Volumes

  • Overall volumes

(Feb-19) Saw volumes picking to their highs at the back of the postponement of the budget speech.

(Feb-24) volumes fluctuated around the recent ADV last week, with an uptick on Wed (19-Feb) after budget was postponed to 12 March.

  • Price to volumes

(Feb-21) Rand looks set to trade 18.30 with the latest implied support at 18.05 and before that it was 18.25.

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • Liquidity hours across currency pairs
  • Currency positions

(Feb-20) Growing optimism on ZAR, in-fact both importer and exporters happy to trade at these lvls. Both dealing in big tickets.

(Feb-24) Rand opens slightly under pressure today.

1.1.3.2 USDZAR levels

(Feb-24) Clients are happy to be short USDZAR below 18.50, otherwise they are long all the way to 18.85.

  • ZAR facing negative sentiments after load-sheeding announcement
  • ZAR facing positive sentiments since may be eligible to exit the FATF gray list in October.
  • ZAR volume weighted price has reduced to 18.35.
  • Range for today 18.50 - 18.25. Thus, we remain rand positive.

(Feb-25) All eyes on SA CPI tomorrow. Expecting a relatively quiet day, range still at 18.50 - 18.25.

(Feb-26) SA inflation came inline with expectation with Core CPI MoM at 0.2%. Rand looks stuck at the 18.50 - 18.30 range.

  • We remain ZAR positive, with a range of 18.50 - 18.25 as before.

1.1.3.3 USDZAR spreads

(Feb-20) The ZAR seems to now be benefit fitting from a weaker $ environment which is also coupled with Gold hitting all time highs and the confirmation by the President that there won’t we a fallout in the GNU following the budget issue.

(Feb-24) Rand held the 18.35 VWAP lvl and the 18.50 - 18.25 range. Importers are happy to trade at these lvls while exporters are staying on the side-lines.

(Feb-25) SA CPI tomorrow is expected to be a catalyst for the next ZAR move, for now, we have mainly traded at that 18.35.

1.1.4 Key events this week:

  • Nvidia earnings, Wednesday [re Deepseek AI model]
  • Germany CPI, unemployment, Friday
  • India GDP, Friday
  • Japan Tokyo CPI, industrial production, retail sales, Friday
  • US PCE inflation, income and spending, Friday
  • Chicago Fed President Austan Goolsbee speaks, Friday

1.2 FX Volatility Update

1.2.1 Update

By Thuto Mukena - Institutional Sales Specialist (Feb-26)

  • Overview

Today’s local CPI print is in focus, with consensus at 3.3% y/y, up from the prior 3%. The ZAR has traded range-bound this week, but the overall momentum has leaned weaker. Yesterday, the ZAR closed at R18.3878/$, stepping into the red alongside its EM peers, as Trump’s tariff plans continued to stir uncertainty. Despite spot edging slightly higher, local implied vols maintained an orderly tone, the 1-week implied vol dropped by 0.22 vol pp to 10.86%. Market participants continue to keep vol expectations below average levels, the 1-week volatility risk premium narrowing to 2.37%, despite key risk events ahead, including CPI and US GDP.

  • G10 & EM

Tariffs and US-Ukraine peace talks remain the key market drivers. On the tariffs front, Trump has now signed an executive action to examine potential copper tariffs, adding to the existing aluminum and steel tariffs set for March. On a slightly brighter note, Ukrainian President Zelensky is expected to visit the US on Friday regarding Trump’s proposed mineral deal. Across the FX Vol spectrum, G10 and EM implied vols were broadly offered on the day, though tariff-related headlines kept USD/CAD as the standout mover, with its 1-week implied vol rising by 188bps. In high-beta space, USD/MXN and USD/INR saw some action, with 1-week implied vols climbing by 82bps and 20bps, respectively.

1.3 Africa

1.3.1 Update

By sizwe Mfayela - Institutional Sales Specialist (Feb-26)

  • Botswana
    • The government of Botswana and De Beers have signed a 10-year deal for sales and an extension of the mining licenses from 2029 to 2054 for Debswana. The deal will also fund a marketing campaign in efforts to increase demand for natural diamonds.
  • Ghana
    • Johnson Asiama, Ghana’s new central bank governor has vowed to implement policies to curb inflation, which has consistently stayed above 20% in the past few years. Asiama plans to have the country’s inflation at single digits by Q2 2026.
  • Mozambique
    • Mozambique has extended a value added tax exemption on essential goods until end of 2025 to relieve pressure on consumers following the violent post-election protests as a result of the Oct 9 elections.
  • Nigeria
    • Nigeria’s 2024 Q4 GDP accelerated to 3.84% vs 3.46% in Q3. The financial services sector was the main driver of growth as it contributed just over 57% to GDP and expanded 5.37% YoY.
    • Nigerian government bonds (29s & 31s) continue to trade with a bid tone, 40-50bps below Monday’s auction clearing levels.
  • Uganda
    • The government of Uganda is set to borrow a €162mio loan from Exim Bank of China to fund power supply and transmission for industrial parks, in efforts to boost economic growth.
  • Zambia
    • President Hakainde Hichilema looks to strengthen Zambia’s relationship with Egypt by exploring new opportunities between the two countries and economic cooperation. Th countries are committed to working together and strengthen economic ties through join public-private ventures.
  • Eurobonds
    • SOAF: Relatively thin flows yesterday, with better buyers of risk in general - ETF and hedge funds, particularly in the long-end. The street was also very in the morning session, with the headlines catalysing some risk transfer.

1.3.2 Economic data

Economic data releases